US: Direct and Private Marketplaces Take Increasing Share of Programmatic

October 16, 2018 (New York, NY) – Concerns over transparency and brand safety are driving an increasing number of advertisers to seek more control when buying ads programmatically. That, coupled with advertisers’ growing desire to leverage first-party data, is pushing buyers away from the open markets toward more private setups.

eMarketer estimates that by 2020, more than four of every five dollars US advertisers invest in programmatic advertising will go to either programmatic direct deals or private marketplaces (PMPs)—not the open markets.

In 2018, programmatic direct in the US will reach $27.47 billion, accounting for 58% of all programmatic display spending, according to eMarketer’s latest US programmatic forecast*. Growth in social advertising (a category that largely contributes to programmatic direct ad spend) and the continued shifting of dollars toward more automated direct deals will help keep investment in programmatic direct high throughout the forecast period.

“An ongoing concern for many buyers and sellers is transparency—both in terms of supply chain quality and how dollars are allocated,” eMarketer principal analyst Lauren Fisher said. “These concerns are not deterring most from buying programmatically. We mainly see marketers redirecting dollars away from the open markets toward more private, controlled setups. As these shifts occur, some marketers are testing the waters by bringing their programmatic efforts in-house. Others are simply forcing their partners and agencies to be more accountable for their ad spend.”

Real-time bidding (RTB), a category that includes both open marketplace and PMP spending, will account for 42% of all US programmatic display spending, or nearly $20 billion, in 2018. Within RTB, spending in PMPs will surpass open exchange spend in 2020.

“Advertisers will continue to favor the use of PMPs to activate coveted first-party data and other premium audience data that they refuse to release into the open markets,” Fisher said. “PMPs are a primary vehicle for enabling that audience data, all without having to commit to guarantees or upfront deals.”

Total programmatic ad spending in the US this year will grow more than 30% to $47.37 billion. By 2020, US advertisers will transact nearly $69 billion in US digital display ad spending programmatically, accounting for more than 86% of the digital display pie.

*Our definition of programmatic display ad spending considers all digital display ad dollars spent programmatically on banners, rich media, video and sponsorships across desktop, mobile devices, and IP-connected TV and over-the-top (OTT) devices. Social media and native ad units are also included in this number.

Methodology
eMarketer’s forecasts and estimates are based on an analysis of quantitative and qualitative data from research firms, government agencies, media firms and public companies, plus interviews with top executives at publishers, ad buyers and agencies. Data is weighted based on methodology and soundness. Each eMarketer forecast fits within the larger matrix of all its forecasts, with the same assumptions and general framework used to project figures in a wide variety of areas. Regular re-evaluation of available data means the forecasts reflect the latest business developments, technology trends and economic changes.

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